Chile gives green light to US$4.4bn coal-fired power plant

The controversial US$4.4bn Hacienda Castilla coal-fired power plant in the north of Chile, has succeeded in winning environmental licensing, after a series of protracted legal disputes. The project is being developed by MPX Energia SA, a company owned by the Brazilian billionaire Eike Batista. It has been fiercely opposed by environmentalists, who are concerned that it will threaten the health of local residents and threat endangered species. However, Chile’s demand for power is growing rapidly. Its generating capacity will need to double from the current 15GW over the next 10-12 years.

The environmental audit required slight modifications to the project and has included the need for periodic independent audits to ensure that the power plant’s emissions are within the required limits. It will now have to obtain sectorial permits before construction can begin.

The plant will be built 700km north of Santiago, in the region of Atacama, near various copper mining projects in the area. Assuming it goes ahead, it will be built over 16 years, eventually forming six 350MW units for a total capacity of 2100MW, rising to 2227MW when a single 127MW backup diesel power unit is included. The original plans called for two such units, but one was eliminated as part of the conditions for environmental approval. MPX will build a port to import coal for the power plant at a cost of US$300m. Construction is expected to take two years.

The power will go to the country’s central power grid, SIC, which supplies 90% of the population. SIC has an installed capacity of around 11.5GW. However, it does not serve the majority of Chile’s copper projects, with that honour going to the northern power grid, or SING.